Council predicted to overspend by £4.1m this year

Shropshire Council has predicted an overspend of at least £4.1m this year due to inflation and rising energy costs, alongside growing demand for council services – particularly for children’s social care and safeguarding.

The forecast is set out in the first quarterly monitoring report of the council’s finances, which highlights that inflation is adding an extra £5m to the costs of running services while extra demand for council services, which is also predicted to increase further as more people face cost of living pressures, is adding almost another £7m.

The council said it is also no longer receiving any money from Government to offset the impacts of COVID although some services are still experiencing knock-on effects from the pandemic such as more demand for social care, reinforced by extra pressures on the NHS.

This, it said, coupled with growing costs in children’s social care in particular, is forcing the predicted overspend this year up between its best case scenario of £4.1m and worst case of £18.8m.
The council says that it will now be focusing its efforts to significantly reduce any overspend.

The report also highlights that the council will need to sell off more capital assets. This will include reducing its number of offices, such as its Mount McKinley offices on Shrewsbury Business Park by next April.

Gwilym Butler, Shropshire Council’s cabinet member for finance, said: “Just as households face very big increases in costs, we’re also facing a really tough year with rising fuel and contract costs, but we remain focused on delivering our priorities set out in our Shropshire Plan.

“The combination of inflation and growing demand for our services, linked to a number of factors, means we are now working hard to identify how we can quickly close the overspend gap between now and next April, while we are also looking at difficult decisions on what we can stop doing to help to make the savings we must find.

“We are working on these now with moves such as the rationalisation of our office accommodation, and initiatives such as our Stepping Stones project reducing the costs of supporting children in care while improving their care experience, which we hope will save us just under £2m this year alone.”